~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EDiscovery Case Law
Court Finds
E-Mails Stored on Old Archiving System Reasonably Accessible; Costs Exaggerated
Starbucks Corp. v. ADT Sec. Servs., Inc., 2009 WL 4730798 (W.D.
Wash. Apr. 30, 2009).
In this
discovery dispute, the plaintiff sought production of e-mails from a specified
time period. The defendant argued the e-mails were archived on the company's
"cumbersome" old system and were not reasonably accessible under
Fed.R.Civ.P 26(b)(2)(B). In support of the position, the defendant's information
technology representative made several claims, including that accessing the
e-mails would be disruptive to business operations and would take nearly four
years to restore. The representative also provided an initial cost estimate for
the work of $88,000, but upped the ante six months later to $834,285. The court
noted that the representative "provided exaggerated reasons and
exaggerated expenses as to why the [defendant] allegedly [could not] or should
not be ordered to comply with its discovery obligations." The court found
that the plaintiff should not be disadvantaged since the defendant, a
"sophisticated" company, chose not to migrate the e-mails to the
now-functional archival system and thus determined that the e-mails were
reasonably accessible. Furthermore, the court explained that even if the
information was ruled not reasonably accessible, good cause existed to order
production.
Court Finds $8
Million Default Judgment for Discovery Violations Not Abuse of Discretion
Magaña v. Hyundai Motor Am., 220 P.3d 191 (Wash. Nov.
25, 2009).
In this
personal injury action, the Supreme Court of Washington reviewed the Court of
Appeals' reversal of the trial court's imposition of a default judgment
sanction on the defendant corporation. Among the defendant's violations: the
defendant limited the search for documents to its legal department; made false,
misleading and evasive responses; and willfully violated discovery rules.
Arguing that the plaintiff's discovery requests were overly broad, the
defendant claimed that the harshness of a default judgment sanction was not
warranted. The court noted that the defendant is a "sophisticated
multinational corporation experienced in litigation," and it analyzed the three
factors assessed by the trial court to determine the appropriateness of a
default judgment sanction - willfulness of violation, substantial prejudice to
opposing party and availability of lesser sanctions. The court found that the
record reasonably and substantially supported the trial court's conclusion, and
it reinstated the $8 million default judgment.
Court
Holds Party in Contempt of Court and Issues Sanctions for Use of Wiping
Software
TR Investors, LLC v. Genger, 2009 WL 4696062 (Del.
Ch. Dec. 9, 2009).
In this
stockholders litigation, the plaintiffs sought default judgment sanctions,
citing the defendant's destruction of electronic evidence in violation of a
court order. The plaintiffs asserted that, following review and encryption of
electronic evidence by a third-party firm, the defendant used wiping software
to permanently delete temporary files in the unallocated space not reviewed by
the neutral party for relevance. The defendant, an "international man of
mystery" who performed sensitive tasks for the Israeli government and was
concerned about the confidentiality of personal documents, claimed that he
believed the wiping software only deleted duplicate copies. Finding the use of
wiping software to be a clear violation of the unambiguous court order, the
court determined sanctions were appropriate. The court declined to impose a
default judgment and held the defendant in contempt, ordering him to pay
$750,000 in attorneys' fees and costs. The court also ordered production of
documents previously subject to a claim of privilege, elevated the defendant's
required burden of persuasion on any counterclaims or defenses, and prohibited
the defendant from prevailing on any material matter based solely on his
uncorroborated testimony.
Court Allows
Forensic Imaging of Hard Drives Containing Medical Records
Cornwell v. N. Ohio Surgical Ctr., Ltd., 2009 WL 5174172 (Ohio
App. 6 Dist. Dec. 31, 2009).
In this
wrongful death litigation, the defendants appealed the trial court's ruling
allowing the plaintiff's forensic expert to create a mirror image of the
defendants' hard drives. The defendants asserted such intrusive access was not
authorized under Fed.R.Civ.P. 34 and would violate prohibitions against the
disclosure of confidential medical information. In affirming the trial court's
order, the appellate court dismissed the confidentiality argument, relying on
testimony of the plaintiff's expert explaining that viewing confidential
information was not necessary to the forensic imaging process. The court also
discarded the defendants' Rule 34 argument, noting that the circumstances
surrounding the case gave rise to an inference of improper conduct on part of
the defendants. In further support of the trial court's decision, the court
noted the direct relationship between the plaintiff's claims and the hard
drives and said the specific protocol and search terms established by the trial
court made the defendants' arguments meritless.
Court Imposes
Adverse Inference Sanction for Party's Failure to Preserve Telephone Message
Vagenos v. LDG Fin. Servs., LLC., 2009 WL 5219021
(E.D.N.Y. Dec. 31, 2009).
In this
action brought under the Fair Debt Collection Practices Act, the defendant
moved to prevent the plaintiff from offering at trial an alleged duplicate of
the automated telephone message that served as the basis of the suit. The
defendant asserted that the original message was destroyed with malicious
intent and therefore was inadmissible. In opposition, the plaintiff maintained
that the destruction of the original message was due to a change in cellular
service providers and testified that the recording reflected the original.
Despite finding no evidence of bad faith, the court determined that the
plaintiff's duty to preserve evidence was breached. The court declined to
preclude the evidence since it would be the "death knell" of the
case, but it found an adverse inference sanction appropriate. In making this
determination, the court noted that the destruction and the plaintiff
attorney's failure to inform his client of the preservation duty were
especially "egregious" and "highly troubling."
